KAGUIN ENTERPRISE (GHANA) LTD vs. UMARCO (GHANA) LTD [1999-2000] 2 GLR 682

CASES REFERRED TO

(1) Sanders Brothers v Maclean & Co [1883] 11 QBD 327; 35 LJQB 481; 49 LT 462, CA.

(2) CILEV v Black Star Line Ltd [1968] GLR 480.

(3) Van Straubenzee v Monck [1862] 2 SW & TR 6; 164 ER 1173.

(4) Allen v Maddock [1858] 11 Moo PC CC 426; 31 LTOS 359; 6 WR 825; 14 ER 757.

(5) Bloxam v Sanders [1825] 4 B & C 941; 107 ER 1309;

(6) Pasticmoda Soceieta per Azioni v Davidsons (Manchester) Ltd [1952] 1 Lloyd’s Rep 527.

[p.686] of [1999-2000] 2 GLR 682 (7) Barber v Meyer Stein (1870) LR 4 HL 317; 39 LJCP 187; 22 LT 808, HL.

(8) Barber v Taylor (1839) 5 M & W 527; 9 LJEx 21; 151 ER 223.

(9) Hermione, The [1922] P 162; [1922] All ER Rep 570; 91 LJP 136; 126 LT 701. (10) Fullwood v Hurley [1928] 1 KB 498; 96 LJKB 976; 138 LT 49 (11) Salomon v Salmon & Co Ltd [1897] AC 22; 66 LJCh 35; 75 LT 426.

(12) Arnhold Karberg & Co v Blythe, Green, Jourdain & Co [1915] 2 KB 379; 84 LJKB 1673. 113 LT 185.

(13) Standard Chartered Bank (Ghana) Ltd v Nelson [1999-2000] 1 GLR 366, SC; [1998-99] SGGLR 810.

(14) John Holt Shipping Services v Edward Nasser & Co Ltd [1971] 1 GLR 205, CA. (15) Pan African Trading Co v Holland West Africa [1976] 1 GLR 237.

(16) Tabury v Ghana Commercial Bank [1980] GLR 90.

(17) Biddel Brothers v E Clemens Horst Co [1911] 1 KB 934; 80 LJKB 584; 104 LT 577; on appeal E Clemens Horst Co v Biddel [1912] AC 18; [1911-13] All ER 98; 81 LJKB 420, HL.

(18) Alfa Enterprises Ltd v Pan African Trading Co [1979] GLR 571, CA.

APPEAL from the judgment of Court of Appeal reversing the judgment of the High Court wherein the trial court held that the appellant company was entitled to delivery of goods shipped when the bill of lading had only designated it as the party to be notified. The facts are sufficiently stated in the judgment of Acquah JSC.

Dr WC Ekow Daniels for the appellant.

T A Tagoe (with him E K Mensah) for the respondent.

Ampiah JSC. It is unfortunate that I have to disagree with my esteemed brothers and sister on their conclusion in this appeal. However, I feel it is extremely desirable that there should be no doubt in the mercantile world with regard to legal principles that have long been recognised.

[p.687] of [1999-2000] 2 GLR 682 The facts in this case briefly are that the plaintiffs as importers (a fact which the trial court found), imported into this country a quantity of rice for sale, from Cargill International SA. The consignment which was carried in the ship MV OCEAN VOICE was covered by an invoice dated 15 June 1989 (this was tendered as exhibit B). The goods arrived at the Tema Harbour around August 1989. The plaintiffs, having been given the relevant documents, including a bill of lading (in a set of six) which was indorsed to them, took step to take delivery of the goods. They engaged the services of the Ghana Ports and Harbour Authority for stevedoring and shore handling for which payment they could not settle in full until action was taken against them. They also paid the defendants, Umarco (Ghana) Ltd, for their clearing and warehousing services. However, when the plaintiffs went later for the release of the goods to them, the defendants released only a portion of the goods and refused to release the rest saying that they had instructions from Cargill International SA (the shippers of the goods) not to release the rest to them. Despite repeated demands, the defendants refused to release the rest of the goods. The plaintiffs therefore took action against the defendants claiming ownership of the goods, the release of the goods to them, accounts and damages for conversion.

The trial court gave judgment in favour of the plaintiffs and granted them the reliefs they sought. Not satisfied, the defendants appealed to the Court of Appeal which allowed the appeal and set aside the judgment of the court below. It is against this decision that the plaintiffs have appealed to this court.

In its judgment, the Court of Appeal relied religiously on the bill of lading (exhibit A) and the content thereof. Particular reference was made to words “Shipper”, “Consignee” and “Notify Address.” In the columns where these words have been inserted, there was no problem with the columns “Shipper” and “Notify Address” as the court found clearly that Cargill International SA were the shippers and Kaguin Enterprises (Ghana) Ltd the persons to be notified. In the “Consignee” column however, was the words “To Order.” The plaintiffs had claimed that although their names had not been inserted at the column as the consignees, on the evidence and the law, they were consignees of the goods. The trial court acceded to this claim but the Court of Appeal held otherwise. It held that Kaguin Enterprises (Ghana) Ltd, the plaintiffs, were only to be notified and that the goods were to the order of

[p.688] of [1999-2000] 2 GLR 682

Cargill International SA. In other words, the goods were to go to whomever Cargill International would direct. Consequently, since the plaintiffs had not been described as the consignees, they could not claim any right to the goods.

It should be noted that the bill of lading (exhibit A) was an agreement between the shipper and the owner of the ship, though reference was made of other persons in the document. In chapter 1 of Paul Todd’s book, Cases and Materials on Bill of Lading, the author states:

“A bill of lading is a receipt issued by a carrier. Thus the transfer of a bill lading, transfers an important right in relation to the goods and in effect the transfer of the bill of lading is equivalent to the transfer of the goods themselves and that its transfer, transfers constructive possession of the good.”

In the case of Sanders Brothers v Maclean & Co [1883] 11 QBD 327 (also in the Casebook on Shipping Law by E R Hardy Ivamy (4th ed), Bowen LJ, stressing the importance and function of the bill of lading as a document of title, states:

“A cargo at sea while in the hands of the carrier is necessarily incapable of physical delivery. During this period of transit and voyage, the bill of lading by the law merchant is universally recognised as its symbol, and the indorsement and delivery of the bill of lading operates as a symbolical delivery of the cargo. Property in the goods passes by such indorsement and delivery of the bill of lading . . . as under similar circumstances the property would pass by an actual delivery of the goods. And for the purpose of passing such property in the goods and completing the title of the indorsee to full possession thereof, the bill of lading, until complete delivery of the cargo has been made on shore to someone rightly claiming under it, remains in force as a symbol, and carries with it not only full ownership of the goods, but also all rights created by the contract of carriage between the shipper and the shipowner. It is a key which in the hands of a rightful owner is intended to unlock the door of the warehouse, floating or fixed, in which the goods may chance to be.”

Paul Todd in his book (supra) explained the functions of the specified persons set down in the bill of lading thus:

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“(1) ‘shipper’ ie the person who shipped the goods and who is normally the consignor.

(2) ‘consignee’ ie the person to whom the goods are consigned, [in other words the person entitled to the goods.] (3) ‘notify address’ ie the person who should be notified of the arrival of the goods.”

And, Charley and Giles in their book Shipping Law (8th ed) explained the purpose for these categories on the bill of lading at page 250-251 as follows:

“In the bill of lading, therefore, the carrier began to agree to carry the goods, say to Antwerp and there deliver them not only (a) to the shipper but alternatively, (b) to the shipper’s order [as in the instant case] so that the shipper could by endorsing on the document order that the goods should be delivered to the buyer to enable the latter to get the goods himself, or (c) to a named consignee. These three options, shared the common feature that the bill operated as the document entitling delivery only in favour the shipper or the shipper’s buyer.”

It is quite clear from the above explanation that three categories of persons may be entitled to the delivery of the goods, namely (i) the shipper himself; (ii) to the shipper’s order which include the person for whom the bill of lading has been endorsed; or (iii) a named consignee. Amissah J (as he then was), delivering his judgment in the case CILEV v Black Star Line Limited [1968] GLR 480 at 485-486, observed: “Where the person unto whom it is stated in this part that the goods are shipped differs from the one given in the ‘notify address,’ I cannot conceive the name given in that notify address being by any stretch of the imagination described a the consignee. It is simple common sense that the consignee of goods is the person to whom the goods are sent and not necessarily the address to be notified of the arrival of the goods at its predestined port. All that the ‘notify address’ means to me is that if the address given is notified of the arrival of the goods the person to whom they are consigned or to whom they ought to be delivered will come forward to take delivery of them. This person may be the owner of the

[p.690] of [1999-2000] 2 GLR 682 address. But there is nothing preventing him from being someone with whom that owner may get in touch to collect his goods waiting for him at the harbour.”

(The emphasis is mine.) In the above observation, his lordship did not think that the evidence on record was enough to identify the “notify addressee” as the owner of the goods; but he did not rule out the possibility that in certain situations, the “notify address” could be the owner, ie the consignee of the goods.

In the instant case, there was no consignee on the bill of lading, but there was abundant evidence, both documentary and by conduct, to show that the goods were consigned to the plaintiffs. If the plaintiffs were only to be notified, then there should be evidence of a direction to them to get the intended owner to be informed to take delivery. As it turned out, it was the plaintiffs who took delivery of the goods; I shall com” “General Principles” at p 600, paras 12-081, the learned authors wrote as follows: “It is often said to be a rule of law that if there be a contract which has been reduced into writing, verbal evidence is not allowed to be given. . . so as to add to or subtract from, or any manner to vary or qualify the written contract.’ Indeed in 1897, Lord Morris accepted that parol testimony cannot be received to contradict, vary, add to or subtract from the terms of a written contract or the terms in which the parties have deliberately agreed to record any part of their contract. This rule is usually known as the parol evidence rule.”

In paragraphs 12-082 of Chitty on Contracts (supra) the authors continued:

“However, the parol evidence rule is and has long been subject to a number of exceptions. In particular, since the nineteenth century, the courts have been prepared to admit extrinsic evidence of terms, additional to those contained in the written document if it is shown that the document was not intended to express the entire agreement between the parties”

(The emphasis is mine.) In Gillespie Bros &Co v Cheney Eggar & Co [1896] 2 QB 59 at 62, Lord Russel CJ stated:

“. . . although when the parties arrive at a definite written contract the implication or presumption is very strong that such contract is intended to contain all the terms of their

[p.691] of [1999-2000] 2 GLR 682 bargain, it is a presumption only, and it is open to either of the parties to allege that there was, in addition to what appears in the written agreement, an antecedent express stipulation not intended by the parties to be excluded, but intended to continue in force with the express written agreement. It cannot, therefore, be asserted that, in modern times, the mere production of a written agreement, however complete it may look, will as a matter of law render inadmissible evidence of other terms not included expressly or by reference in the document. The Court is entitled to look at and should look at all the evidence from start to finish in order to see what the bargain was that was struck between the parties.”

Perhaps, it would not have been necessary to refer to the above observation, since the plaintiffs, apart from being notified of the arrival of the goods, were not parties to the bill of lading. But since their name appears on the bill of lading as persons to be notified, it is necessary to look outside for evidence of their connection to the bill of lading. The bill of lading is an agreement between only the shipper [the owner of the goods] and the shipowner. It is a receipt of goods delivered to and received by a ship signed by the person who contracts to carry them and stating the terms of the contract of carriage under which the goods have been so delivered and received. What is contained in the bill of lading may not contain all the terms of the agreement between the plaintiffs and the owners of the goods.

In the instant case, great emphasis has been laid on what the bill of lading says without considering the contractual relationship between the plaintiffs and the shipper. In other words, the words of the bill of lading are being interpreted against the plaintiffs when they were not parties to that agreement. Could it be said that the plaintiffs were a mere busybody who were only to be notified to pay for services, clear the goods and warehouse them without any interest whatsoever in the goods, even though they have been found to be the importers of the goods? It is also said that there was an agreement between the defendants and Cargill International SA for the disposal of the goods. I shall presently comment on this so-called agreement. Suffice it to say that in this agreement the plaintiffs were not parties and in fact were not aware of it. The agreement was undated! If in fact, there existed such an agreement, why would the defendants ask the plaintiffs to pay for their

[p.692] of [1999-2000] 2 GLR 682 services in clearing or warehousing the goods? Why should the plaintiffs, as importers, be kept in the dark about this agreement? To do justice in the case, it is necessary that all these issues be resolved. It is necessary that the totality of the evidence be looked at critically. That is why extrinsic evidence is necessary to explain and/or add to the statements in the bill of lading.

Exhibit B, the invoice issued to the plaintiffs, is the document which gives an idea of the contractual relationship between the plaintiffs and Cargill International in connection with the goods [rice] which were shipped to Ghana. This document is dated 5 June 1989. It states:

“OUR SALE DATED 12 JUNE 1989 COVERING 4.650 METRIC TONS, 10 PERCENT MORE OR LESS OF US NO 5/20 LONG GRAIN MILLED RICE IN 50 KILOS POLY PROPYLENE BAGS MV OCEAN VOICE B/L 07/10/89.”

The bill of lading contained the same description and quantity of rice as contained in the invoice, exhibit B. The goods were shipped on MV OCEAN VOICE. The “B/L” on the invoice is the abbreviated form of “bill of lading” which was to accompany the shipment. The date on the invoice is identical with the date on the original bill of lading which followed the shipment of the goods. This was a “CDF” (cost, insurance and freight) contract which stated the full amount (inclusive of the cost, insurance and freight) which was due to the shipper on the delivery of the goods. This invoice was duly signed by Cargill International, the original owners of the goods and as the shippers. This was part of the documents handed over to the plaintiffs when the goods arrived to enable them take delivery of the goods.

In considering the nature of the contract and the contractual relationship between the parties, it is necessary not to look only at the bill of lading, but also at all the documents given to the plaintiffs, together with the conduct of the parties, to identify who in fact are the consignees of the goods. The general principle of law is that:

“Any document in existence when a contract is executed and sufficiently described to enable it to be identified may be incorporated with the contract, may be referred to for the purpose of construction whether incorporated in the contract or not. It has been said that the document must not only be in

[p.693] of [1999-2000] 2 GLR 682 fact in existence when the contract is made, but also it must be described as existing. It follows that if the contract refers to the document to be incorporated, parol evidence is admissible to enable the document to be identified, but parol evidence is not admissible to prove that the document was in existence at the date of the document.”

See Van Straunbenzee v Monck [1862] 3 SW and TR 6 and Allen v Maddock [1858] 11 Moo PCCC 427.

In Ghana, like any other sovereign State, exportation and importation of goods are governed by statute law. One does not just get up, collect a quantity of goods and import the goods to another country and start selling them to the people. The law governing exportation and importation of goods in Ghana is contained in the Export and Import Act, 1995 (Act 503), section 7 of which states:

“7. (1) Any person may import goods into Ghana for commercial purposes if that person completes an Import Declaration Form.

(2) An importer shall submit one copy of the completed Import Declaration Form-

(a) to the inspector appointed under this Act before shipment; and

(b) to the Commissioner and any other agency which may be specified on the form after shipment.

(3) No importer shall be permitted to take delivery of any commercial import unless he has complied with subsection (2) of this section.”

It follows then, that without compliance with the statute, Cargill International could not import rice into the country and direct Umarco (Ghana) Ltd, the defendants in this case, to sell when the latter were not the importers. As was found by the court below, the only person who could be described as the importer legitimately is the plaintiff company. It cannot be true therefore that Cargill International could import goods (rice) to this country and have them sold in accordance with their ‘order’ without a specified or named importer who is qualified to take delivery of the goods and sell them in Ghana.

The so-called agreement between Cargill International and Umarco (Ghana) Ltd is false and designed to defeat the ends of

[p.694] of [1999-2000] 2 GLR 682 justice. It was undated. Definitely, it was made after the impasse between Sane and Diawusie, the shareholders in the plaintiff company. There was evidence that Mr Sane had been working with Cargill International in the importation and sale of rice. It is therefore not true that Cargill International at the time it sent the rice in dispute wanted them to start dealing in rice importation in Ghana as the said agreement purported to say.

According to Mr Diawusie, the plaintiffs’ representative who testified on behalf of the plaintiffs, he as well as Mr Sane took part in the negotiations which culminated in the sending of the rice to Ghana. Under cross-examination, this is what the plaintiffs’ representative said:

“. . . I know about the negotiations which led to the importation of the rice. The negotiation was between Cargill and Kaguin Enterprises. Yes, I took part in the negotiation. The terms of the negotiation —Cargill was to send the rice to Kaguin in Ghana who will sell, and thereafter pay Cargill.”

(The emphasis is mine.) There was no challenge to this vital piece of evidence. Of course, Cargill International itself never gave evidence of the terms of this agreement. This agreement was prior in time to the so-called agreement between Cargill International and Umarco (Ghana) Ltd.

I should have thought that having authorised the defendants to sell the rice, Cargill International would have joined in the action or testified in contradiction of the alleged terms of the negotiated agreement as given in evidence by the plaintiffs’ representative and, also explain how exhibit B, the invoice, which was prepared and signed by Cargill International came into existence and why the plaintiffs which were to be notified only of the arrival of the goods came by exhibit B and were also made responsible for the customs clearance, stevedoring, clearing and warehousing expenses of the goods. Thus, even though the bill of lading did not state on the face of it that the plaintiffs were the consignees of the goods, the preponderance of the evidence supported the plaintiffs’ claim that they were the consignees or owners of the goods imported. The evidence overwhelming shows that all the relevant documents necessary for taking delivery of the good were sent to the plaintiffs. These included:

(i) the bill of lading which was endorsed to them, exhibit A.

(ii) the invoice, exhibit B.

[p.695] of [1999-2000] 2 GLR 682 (iii) the phytosanitary certificate, exhibit C, which came from the place of shipment of the goods and which described the plaintiffs as the consignees; obviously an information which had been given to the authorities by the shippers, Cargill International

(iv) the clean report of findings, exhibit D; and

(v) the notice of readiness, exhibit I.

In his evidence for the defendants, Mr Max Palliades, the second defendant witness and the managing director of the defendant company, at the relevant period, stated among others:

“(1) 1 know one Edward Henry Sane. I knew him as managing director of the plaintiff-company in respect of rice consignment. He was sent by Cargill International to meet me at Umarco…

(2) I did submit to NIC invoices and six bills of lading already indorsed to Kaguin, (3) The plaintiffs paid some amount to Umarco.

(4) Yes. Umarco are clearing agents. Yes in this case we cleared the goods for the plaintiffs…

(5) The plaintiffs are supposed to pay Cargill International.”

(The emphasis is mine.)

The fact that the defendants acted only as clearing agents for the plaintiffs was borne out by exhibits G and H. Exhibit G states:

“This is to note, that we the attending representatives of receivers Kaguin, have received from the Master of MV OCEAN VOICE, copies of notice of readiness to discharge at Port of Tema.”

Exhibit H is the notice of readiness given by the carrier MV OCEAN VOICE to the shipper’s receivers, ie Kaguin Enterprises (Ghana) Ltd, the plaintiffs, advising them of the captain’s readiness to discharge the rice. In other words, the captain was ready to fulfill the obligation imposed by the contract. It must be noted that at that time, according to Mr Max Palliades, the second defendant witness, he had endorsed the bill of lading in a set of six, including the original (exhibit A) to the plaintiffs.

In Bloxam v Sanders (1825) 107 ER 1309 at 1312, Bayley J said:

“. . . where goods are sold and nothing is said as to the time of delivery or the time of payment . . . seller is liable to deliver

[p.696] of [1999-2000] 2 GLR 682 them whenever they are demanded upon payment of the price; but the buyer has no right to have possession of the goods till he pays the price. . . If the goods are sold upon credit [as in this case] and nothing is agreed upon as to the time of delivery of the goods, the vendee is immediately entitled to the possession, and the right of possession and, the right of property vests at once in him.”

The only evidence of the contractual relationship between the plaintiffs and Cargill International, apart from exhibit B (the invoice), was given by the plaintiffs’ representative, Mr Diawusie. He said: “The terms of the negotiation—Cargill was to send the rice to Kaguin International in Ghana who will sell and thereafter pay Cargill.” As stated before, this piece of evidence was not challenged; this was confirmed by Mr Max Paillades, the defendants’ managing director, who said: “Kaguin was to pay Cargill International.” There is no evidence that the price was demanded of the plaintiffs before the bill of lading was endorsed to them.

It has been argued that since the plaintiffs had not paid for the rice, they could not demand the release of the rice to them. If it is established that the property in the goods had passed to the plaintiffs, it would not be a proper duty of the court to deny the plaintiffs their claim to the goods. The remedy of the seller would be as set down under the Sale of Goods Act, 1962 (Act 137). The plaintiffs gave evidence of the terms of the contract with Cargill International; they were “to sell the rice and pay Cargill International.” The court is precluded from presuming an intention to pay before delivery. A principle of construction has it that, it is not the function of the court to ascertain what the parties have intended outside the specific terms of their agreement. It is not permissible to guess at the intention of the parties and substitute the presumed for the expressed intention. And even if the goods had been transferred on a condition requiring a confirmed credit, the waiver of that condition by delivery of the bill of lading to the buyer, the seller may not later rely on the buyer’s failure to comply with the condition, unless he has given reasonable notice that he requires compliance: see Plasticmoda Societa Per Azioni v Davidsons (Manchester) Ltd [1952] 1 Lloyd’s Rep 527, CA.

The Bills of Lading Act, 1961 (Act 42), s 7 provides:

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“7. (1) Every consignee of goods named in a bill of lading, and every endorsee of a bill of lading to whom the property in the goods therein mentioned passes under the contract in pursuance of which he endorsement was made, shall have transferred to and vested in him all rights, and be subject to the same liabilities in respect of the goods as if the contract expressed in the bill of lading had been made with himself.

(2) Nothing in, this section shall prejudice or affect any right of stoppage in transitu or any right to claim freight against the original shipper or owner, or any liability of the consignee or endorsee, or of his receipt of the goods by reason or in consequence of the consignment or endorsement.”

(The emphasis is mine.) The bill of lading is the most important document recognised by the law merchant, as the symbol of the goods described in it. The person who holds it as a consignee or endorsee for business purposes, is in a good position as if the goods were actually in his possession.

The bill of lading, exhibit A, on its face states that it is a CIF contract, ie costs, insurance and freight. Under a CIF contract the duty of the seller so far as physical handing over of the goods themselves is concerned, is accomplished when the goods are put on board the ship or other specified place or vehicle for the purpose of the transit; but in addition, he is under an obligation to make contract of affreightment with the carrier under which the goods will be taken to the contractual destination and there to effect an insurance available for the buyer and to forward the bill lading, policy of insurance and invoice to the buyer. The contract thus in a commercial sense, is an agreement for the sale of goods to be performed by delivery of documents; its salient characteristic in law being that the property in the goods not only may but must also pass by delivery of the documents against which payment is made. Against tender of these documents, the buyer’s liability to pay the price arises.

Section 61 of Act 137 provides, among others, the following:

“61. In a c.i.f contract, unless a contrary intention appears (a) The seller is bound at his own expense, to ship the goods during the agreed period, if any, to the port agreed upon or to acquire goods afloat which have been shipped;

[p.698] of [1999-2000] 2 GLR 682

(b) the seller is bound, at his own expense, to effect on the goods an insurance of the type normal for goods and a voyage of the kind in question;

(c) the seller is bound to transfer to the buyer proper shipping documents in accordance with the terms of the contract;

(d) the buyer is bound to take up proper shipping documents and, on doing so, to pay the price in accordance with the terms of the contract;

(e) the goods are deemed to be delivered to the buyer, and the property therein accordingly, passes to the buyer, on the transfer to him of the bills of lading; and

(f) the risk in the goods passes to the buyer when they are shipped or acquired afloat.”

The evidence shows overwhelmingly that all the relevant documents were handed over to the plaintiffs. On the defendants’ own evidence, through Max Palliades, when the goods arrived, he indorsed the bill of lading, six in number, including exhibit A, to the plaintiffs who engaged the defendants as clearing and warehousing agents; the defendants were paid. Thus, on the evidence as I have tried to establish, the plaintiffs were consignees and even if this is not acceptable they were endorsees of the bill of lading. The property in the goods under Act 137 passed to them. And, even if, subsequently, other copies of the bill of lading were issued to some other persons, the first endorsement not only of a part of the goods but all the goods as contained in the bill of lading, vested in them the property in the goods; all other endorsements were unenforceable. In Barber v Meyerstein (1870) LR 4 HL 317, it was held, inter alia: “The person who first gets the bill of lading [though only one of a set of three] gets the property which it represents, he need not do any act to assert his title, which the transfer of the bill of lading of itself renders complete, and any subsequent dealings with the others of the set are subordinate to the rights passed by that one.”

It has not been shown that the plaintiffs used fraud or some tricks to obtain the bill of lading. In fact, the evidence shows that they were duly informed of the shipment of goods, and their arrival at

[p.699] of [1999-2000] 2 GLR 682 the harbour and, all documents in respect of the goods, including the bill of lading were handed over to them. The bill of lading was endorsed to them and they in pursuance thereof took the necessary steps to get the goods evacuated from the ship, cleared and warehoused at their own expense. What else were they supposed to do to show that they were the owners of the goods?

The defendants were paid for their services. This was admitted by Mr Max Palliades, the second defendant witness and the managing director of the defendant company. The defendants were therefore only clearing and warehousing agents. Their relationship with the plaintiffs was in the form of bailment for consideration, ie hire of custody (locatio custodiae). There was a contract of custody for reward for services. As custodians, they were to deal with the goods in the manner authorised by the bailor, (the plaintiff); they could not without authority hand the goods over to a third party. If they deal with the goods in a manner not authorised, they take the risk of so doing. An agent is bound not to act contrary to the principal’s instructions. This is the dictum in Barber v Taylor (supra). See also The Hermione [1922] PD 162. In Chitty on Contracts (Specific Contracts) (12th ed), Vol II, at p 51, para 2095, the authors state: “If the agency contract is for consideration the agent must do what he has undertaken to do; he must, in performance of his duties, carry out any express instructions given him by his principal even though he may reasonably believe that in departing from them he would be promoting his principal’s interest.”

The learned authors continued:

“An agent must not, without first obtaining the informed consent of his principal, put himself in a position when his duty to the principal is likely to conflict with his own interest, or the interest of another principal.”

And, in the case of Fullwood v Hurley [1928] 1 KB 498 at 502, CA. Lord Hanworth MR said: “. . . if and so long as the agent is the agent of the party, he cannot engage to become the agent of another principal without the leave of the first principal with whom he has originally established his agency.”

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As I have said elsewhere in my opinion, it is not true that the shipment of the instant rice was the first business that Cargill International was starting in the country. According to Mr Palliades, the second defendant witness, Cargill International has been doing business with the defendants. In fact, the second defendant witness once worked for Cargill International.

The agreement purported to have been made between Cargill International and Umarco, the defendants, trying to show that Cargill International was then trying to start business in Ghana, could not have been made before the importation of the rice. Besides, if indeed it had existed, Cargill International and for that matter the defendants would not have placed the responsibility of off-loading on the plaintiffs and it would not have been necessary for the defendants to charge the plaintiffs for clearing and warehousing. Why were the plaintiffs to be notified only? According to the chairman of the National Investigations Committee (NIC), the third defendant witness, the NIC by its letter of 11 April 1990 informed Umarco (Ghana) Ltd to get in touch with Cargill International to direct what was to be done with the remaining quantity of rice! It is quite clear from the evidence that the alleged agreement was an afterthought, false and deliberately designed with the sole aim of overreaching the interest of the plaintiffs.

The National Investigations Committee Law, 1982 (PNDCL 2), s 3 provided, inter alia, power to the committee to investigate:

“(a) allegations of corruption, dishonesty, or abuse of office for private profit against any person or group of persons who held high office of State or public office in Ghana, or may be shown to have acted in collaboration with any such person holding a high office of State or any public office in respect of any of the foregoing acts;

(b) allegations of breaches by any person or group of persons of mandatory provisions of any Constitution or Proclamation under which Ghana has been governed while the said Constitution or Proclamation was in force;

(c) allegations of breaches of statutes or other laws whereby damage was caused to the national interest;

(d) any person who may have wilfully and corruptly acted in such a manner as to cause financial loss or damage to the State, or who may have directly or indirectly acquired

[p.701] of [1999-2000] 2 GLR 682 financial or material gain fraudulently or illegally to the detriment of the State;

(e) any other acts or commissions which may be shown to be detrimental to the economy of Ghana or to the welfare of the sovereign people of Ghana or in any other way to the national interest;

(f) any other matters which may be referred to it by the Council for investigation.”

A critical look at the powers of the NIC would show that if at all, the only matters it could have investigated in the instant case fell under section 3(b) and (c) of PNDC 2. The Ghana Investment Promotion Centre itself had not referred anything to the NIC, though it claimed Sane, one of the shareholders in the plaintiff company, was a foreigner and had not satisfied conditions which would enable him do business in Ghana. Therefore, there could not have been an allegation of breaches of mandatory provisions of the Constitution, 1992 or the Proclamation to enable NIC, investigate under section 3(b) of PNDCL 2. The matter brought before the NIC was a personal matter between Mr Diawusie and Mr Sane, shareholders in the plaintiff company whereby Mr Diawusie accused Mr Sane of cheating him in their business. CO Lamptey, the third defendant witness and the chairman of the NIC, said: “Yes, I agree that exhibit 21 should be confined to the fact that a foreign national was carrying on business in this country.” (The emphasis is mine). It was not the business of the NIC therefore to pronounce on the ownership of the rice in dispute. Besides, it was required under section 12 of PNDCL 2 that the NIC report periodically to the Provisional National Defendant Council for the appropriate action to be taken. Further, section 11 of PNDCL 2 states:

“11. Where the Committee is satisfied from its investigations that there exists evidence which may be put before a Court, Public Tribunal or other judicial body, it shall refer such evidence to the Attorney-General, Public Prosecutor or to any other appropriate body for further steps, including a trial, to be taken in the matter.”

Of course, since Mr Sane, an alien, failed to satisfy the provisions of the Ghana Investment Promotion Centre Law, he could not continue as the managing director of Kaguin Enterprise

[p.702] of [1999-2000] 2 GLR 682

(Ghana) Ltd, the plaintiff company. The bank was entitled lawfully to withdraw its security. This left Mr Sane as a managing director who could do no business. This situation however did not take away the rights vested in the plaintiffs in so far as their contractual relationship with Cargill International in the importation of the rice was concerned.

A distinguishing characteristic of a company limited by shares, such as the plaintiff company, is that once the formalities of the Companies Code, 1963 (Act 173) have been complied with, the registered company exists as a legal entity distinct in law from those persons who from time to time are members: see Salmon v Salmon & Co Ltd [1897] AC 22, HL. Even though it was Sane and Diawuse who negotiated for the rice in dispute, they did so for Kaguin Enterprise (Ghana) Ltd. So, whatever contract there was, was between Kaguin and Cargill International. The fact that Mr Diawusie complained against Sane did not affect the stand of Kaguin in the contract with Cargill International. By going outside the matter which was reported to it and issuing a report about an issue involving the importation of rice by Kaguin, the NIC created confusion in the minds of the shipper of the rice; the bank which required some security from Sane; and the Ghana Investment Centre which required that Sane, a foreigner, satisfy the statutory requirement before doing business. The report generated a lot of correspondence among the above-named authorities. In that confused state of affairs, Cargill International and its associates decided to find a means of disposing of the imported rice. Since the rice was already with Umarco, the defendants, for warehousing and there was an already existing relationship between Umarco and Cargill International, Cargill International decided to let Umarco have the rice as its agent for purpose of selling them. They subsequently contracted with Saga Ghana Ltd, which was formerly Umarco Ghana Ltd, to have the rice sold, apparently in pursuance of a court order. Under those circumstances, Cargill International pretended as if it had a previous agreement with Umarco to dispose of the rice in accordance with the former’s order. I have already commented on the so-called agreement: It was a fraudulent device!!

Even though the bill of lading did not show that the rice had been consigned to the plaintiff but “To Order”, the evidence shows that there could have been no other consignee apart from the plaintiffs to whom the bill of lading was endorsed and which,

[p.703] of [1999-2000] 2 GLR 682 in fact, carried out their part of the agreement as contained in the invoice sent them, by paying for the services required for unloading the rice and warehousing it at the warehouse of the defendants. By the authorities referred to in this opinion, the property in the goods became vested in the plaintiffs when all the relevant papers were handed over to them and they took delivery of the goods. The property in the goods having thus passed, Cargill International could only pursue their rights under Act 137, section 44 of which states:

“44. Subject to the provisions of this Act, and subject to any contrary intention an unpaid seller may recover possession of the goods from the buyer after they have delivered to him if—

(a) the property has not passed to the buyer; or (b) the property has passed to the buyer but the contract expressly confers a right on the seller to recover possession and the buyer fails to pay the price in accordancewith the terms of the contract, but not otherwise.”

(The emphasis is mine.) The only terms of the contract was supplied by the plaintiffs’ representative in court. It was that the rice was to be sold and paid for later. There was no other evidence. The seller was therefore not entitled to recover possession of the goods. An unpaid seller may also resell the goods in certain situations: see section 45 of Act 137; and he may sue for the price of the goods: see section 46 of Act 137.

The property in the goods vested in the plaintiffs as soon as they took delivery of them. The defendant had possession but only as bailees. As bailees for consideration, they were not entitled to release or hand over the goods to any other person except the bailor, the plaintiffs. The refusal to release the rice to the plaintiffs on demand and the handing over of the goods to Cargill International amounted to conversion; the plaintiffs were entitled to recover damages for conversion.

The judgment of the High Court was therefore amply supported by the evidence and the law. The Court of Appeal was wrong in setting that judgment aside. I would allow the appeal and set aside the judgment of the Court of Appeal and restore the judgment of the High Court.

[p.704] of [1999-2000] 2 GLR 682

Adjabeng JSC. The action in this case by the plaintiff-respondent-appellants (hereinafter referred to as the plaintiffs) which has culminated in the appeal presently before us is, to me, uncalled for. I must say that in my view it is not only a frivolous action, but it is also an attempt to dupe the owners of the goods involved, that is, Cargill International SA Antigua. For, how else can one explain the conduct of the plaintiffs when they have failed up to today to pay for the 700 metric tonnes of rice released to them? That is 14,000 bags of rice, according to the plaintiffs’ representative in his evidence under cross-examination. And even though the plaintiffs failed to pay for this huge quantity of rice which they had sold, they took this action claiming the whole consignment of 4,659.014 metric tonnes of the rice. The reliefs claimed by them are as follows:

“(1) A declaration that the plaintiff is the owner/consignee of 4,659.014 metric tonnes of rice imported from Cargill International SA Antigua in or about July 1989.

(2) An order upon the defendant to account to the plaintiff for the ¢4,659.014 metric tonnes of rice or any portion or part of the said consignment disposed of by the defendant.

(3) Another order upon the defendant to pay general damages for conversion.”

What is the basis of the plaintiffs’ claim? In paragraph (3) of their statement of claim, the plaintiffs aver that they imported the said consignment of rice from Cargill International. In their paragraph (6), the plaintiffs aver that they ordered the said rice. The most significant averment in the plaintiffs’ statement of claim, however, is in paragraph (5) thereof. There they aver as follows:

“(5) The defendants were shipping agents, and were in receipt of the bill of lading, which stated that the plaintiff was the party to be notified of the arrival of the rice, and the consignee of the said goods was ‘To Order.’”

According to the plaintiffs in their statement of claim, when the rice arrived, the defendant-appellant-respondents (hereinafter referred to as the defendants) released to them only “14,000 bags of rice weighing 700 metric tonnes.” The plaintiffs aver that the defendants refused to release the remainder of the rice to them and purported “to act upon an agreement between them, the defendants

[p.705] of [1999-2000] 2 GLR 682 and Cargill International SA Antigua with its offices in Geneva” which agreement the plaintiffs considered illegal.

The defendants’ answer to the plaintiffs’ claim is amply stated in their statement of defence, especially paragraphs (2)–(7). There they aver as follows:

“(2) The defendants . . . say that the said rice described in the said paragraphs were imported by Cargill International SA Antigua, Geneva branch as manifested in a bill of lading when it stated in the column of consignee ‘TO ORDER’ but requesting that the plaintiff be notified of the importation of the rice and thus caused the plaintiffs’ name to be inserted in the notifying column of the bill of lading.

(3) The defendant says that the declarations on the bill of lading dated 10 July 1989 which covered the importation of the rice indicated that there was no consignee. That the shipper will inform the agent later on whom the rice should be delivered to by stating in the column reserved for consignee ‘TO ORDER.’ (4) The defendant says that it is usual for shippers to protect themselves when a consignment has not been paid for, as was the case in this shipment, to hold on to the commodity and allow it to remain their property by inserting in consignee column ‘TO ORDER’ as was done in this shipment’s bill of lading of 10 July 1989.

(5) The defendant says that Cargill International SA Antigua, Geneva branch remained owner of the rice throughout.

(6) The defendant denies paragraph (6) of the statement of claim and says that whether or not the plaintiff ordered the whole consignment of rice is neither here nor there. The important issue is whether it paid for it and all the other incidental expenses to enable Cargill Inter-national SA Antigua, Geneva branch, the owner of the rice to deliver it to it.

(7) In answer to paragraph (7) of the statement of claim, the defendant says that the 14,000 bags of rice released the plaintiff was all that Cargill International SA Antigua, Geneva branch authorised the defendant to release to the plaintiff under the agreement between Cargill International SA Antigua, Geneva branch and Saga acting for [p.706] of [1999-2000] 2 GLR 682 and on behalf of Umarco (Ghana) Limited, and acting as Umarco’s true and lawful attorney. The plaintiff was not entitled to anything else and the defendant could not give it anything more than the owner had instructed.”

From the plaintiffs’ own statement of claim, and the explanation given in the defendants’ statement of defence, as quoted above, it is clear that the plaintiffs’ action was doomed to failure. In paragraph (5) of their statement of claim, quoted above, the plaintiffs admit that the bill of lading in respect of the rice imported, which bill, in shipping law and practice, is the document of title to the goods shipped, was not sent to them, the plaintiffs, but to the respondents who are shipping agents and warehousing operators. Secondly, in the said bill of lading, according to the plaintiffs’ said paragraph (5), the plaintiffs were not stated as the “consignees” of the goods but only as the “party to be notified of the arrival of the rice. . .” And, more importantly, according to the said paragraph (5), the consignee of the rice was stated to be “TO ORDER.” What does this term “To Order” mean? Simply, this means that the rice shipped was still under the control of the owners and shippers thereof, namely, Cargill International, to be delivered to whomsoever they would instruct the holders of the bill of lading to deliver. In this case, the owners of the goods sent the bill of lading to the defendants and instructed them to store the rice in their warehouse. They were also to deliver 700 tonnes thereof (that is, 14,000 bags) to the plaintiffs who were to pay for it and also pay all the incidental expenses made in respect of the said quantity of rice. The evidence also shows that the owners of the rice, Cargill International, instructed the defendants to deliver to the plaintiffs another consignment of the same quantity whenever they had fully paid for the first consignment released to them.

It is surprising that even though the plaintiffs clearly admitted in the said paragraph (5) their statement of claim that they were not mentioned as the consignees of the rice in the bill of lading (their exhibit A), they contradicted this in their evidence. In his evidence under cross-examination at the trial, the plaintiffs’ representative said categorically that: “By exhibit A, I am the consignee.” This contradicts not only the said paragraph (5) of the plaintiffs’ statement of claim, but also the bill of lading, exhibit A, tendered in evidence by the plaintiffs. Yet, the trial High Court ignored this

[p.707] of [1999-2000] 2 GLR 682 serious contradiction in the plaintiffs’ case and gave judgment for them.

On appeal to the Court of Appeal, the appellate court rightly reversed the trial High Court’s decision. In a clear, sound and comprehensive judgment delivered by the Court of Appeal, the court, per Foster JA (of blessed memory), stated, inter alia as follows:

“The trial judge purported to rely on CILEV v Black Star Line Ltd [1968] GLR 480, CA, but in that case Amissah JA (sitting as an additional High Court judge) said at 485-486:

‘where a person unto whom it is stated in this part that the goods are shipped differs from the one given in the ‘notify address’, I cannot conceive the name given in that notify address being by any stretch of imagination described as the consignee. It is simple common sense that the consignee of the goods is the person to whom the goods are sent and not necessarily the address to be notified of the arrival of the goods at the prescribed port.’

Thus in the instant case, the notify address cannot be comprehended as the consignee, for if indeed the shipper, Cargill, had intended the respondents (appellants herein) as the ‘consignee’ their name would have been inserted in that space reserved for that designation and not ‘notify address.’ In the bill of lading, the rice was consigned ‘To Order.’ That means delivery to any particular person as may be determined or ordered by the shipper. In the Black Star Line Ltd case (supra), Amissah JA, having considered some English cases, observed at pages 487-488:

‘I do not think that these authorities support the proposition that where goods are shipped under a bill of lading which expressly says that the carriers must deliver to the order of the shippers, just because on previous occasions the shipper had ordered the goods to be delivered to a particular person, so that the carrier must deliver to that same person even though this time the shipper orders that they may be delivered to another … I do not therefore agree that the course of business entitles the defendants, as carriers, to per determine the

[p.708] of [1999-2000] 2 GLR 682 consignees of goods which according to the bill of lading are to be delivered unto order and no more.’

Although in the above passage, it was the carrier whose act of delivering the goods to the person who had not been named as a consignee that was in issue, it seems to me nonetheless that the above extract of Amissah’s judgment is equally applicable here. In the instant case, the trial judge ignored the purport of ‘To Order’ of the shipper and sought to equate the person named in the ‘notify address’ with the consignee. It was entirely for Cargill, the shippers, to have specified the consignee but they opted to reserve to themselves their right to order the delivery of the rice to any person whom they might name.”

The Court of Appeal also relied on the English case of Arnhold Karberg & Co v Blythe, Green, Jourdain & Co [1915] 2 KB 379 at 387, where Scrutton J (as he then was) stated the principle as follows: “Where the seller by taking the bills of lading in his name or to his order has reserved the jus disponendi or power of dealing with the goods, the property does not pass on shipment, but it is vested in the vendor until he receives payment from the buyer in exchange for the documents of title. If the seller has taken the bill of lading in the purchaser’s name, but retains it as security to her price, the property appears to vest on the buyer’s tendering the price.”

Also in their judgment, the Court of Appeal explained that:

“Cargill’s failure to send any bills of lading to the respondents [the appellants] herein and their substitution of ‘To Order’ in place of a named consignee, were of course deliberate, as the evidence showed.”

According to the judgment, the purpose was the protection of their financial interest; that is, to ensure that the goods were paid for. In respect of the other documents the plaintiffs tendered in evidence in support of their case, the Court of Appeal had this to say:

“The respondents tendered documents in support of their claim that they were the consignges. These were: invoice from Cargill (exhibit B); Photo sanitary certificate (exhibit C)

[p.709] of [1999-2000] 2 GLR 682 and SGS Clean Report of Findings (exhibit D). The documents do not prove the respondents’ title to the goods. They are no substitute for a title document. They advance the claim no further from where it has been left marooned by the available evidence.”

It is against this decision that the plaintiffs have appealed to this court on the grounds that the judgment is against the weight of evidence, and also that the costs awarded are excessive. In paragraph (17) of the statement of case filed on behalf of the plaintiffs, it is stated as follows:

“(17) Nature and effect of a Bill of Lading of goods.

Another point, the subject-matter of this appeal is the question about the legal nature and effect of a bill of lading of goods. The Court of Appeal relied on the case of Arnhold Karberg & Co v Blyth, Green, Jourdain & Co (supra). It is submitted that this case does not apply to the issues involved in the present case. The seller Cargill, by the bill of lading, did not take the bills of lading in his name or to his order. In this case the bill of lading was made to the order of the consignee not to the consignor or shipper.”

In answer, the defendants, in their statement of case, submitted, rightly in my view, that: “the main ground of appeal that the judgment is against the weight of evidence, is wholly misconceived and frivolous, as the inferences drawn by the Court of Appeal in its judgment are supported by oral and documentary evidence in the two volumes of the record of appeal. There are serious misdirections and wrong inferences made by the learned trial judge from the oral and documentary evidence on the record of appeal.”

Indeed, the plaintiffs’ appeal on the sole ground that the Court of Appeal’s decision is against the weight of the evidence adduced at the trial is not only misconceived; it is also very frivolous. And it is most unfortunate for the plaintiffs and or their counsel to state in their statement of case that: “The seller Cargill by the bill of lading did not take the bills of lading in his name or to his order.” And that: “in this case the bill of lading was made to the order of

[p.710] of [1999-2000] 2 GLR 682 the consignee not to the consignor or shipper. (The emphasis is mine.) It is unfortunate because the above submissions clearly contradict paragraph (5) of the plaintiffs’ statement of claim, quoted earlier, and their exhibit A, the bill of lading, where it is stated that the goods were made “To Order;” that is, to the order of the consignor or the shipper. In the circumstances, if any judgment was against the weight of the evidence, it was the judgment of the trial High Court, and not that of the Court of Appeal. As I have indicated earlier, therefore, having regard to the averment in paragraph (5) of the statement of claim, and the evidence in the bill of lading, exhibit A, the plaintiffs action was doomed to failure from the very beginning.

In the circumstances, I have no hesitation at all in saying without more, that I find the decision of the Court of Appeal unassailable. Having regard to the evidence and the law applicable, I find the judgment to be sound and ought not to be disturbed. The appeal must accordingly fail.

Acquah JSC. This is an appeal against the unanimous judgment of the Court of Appeal which had reversed that of the trial High Court in a suit wherein the plaintiff, Kaguin Enterprise (Ghana) Ltd, claimed ownership of a consignment of 4,659.014 metric tonnes of rice brought into this country by Cargill International SA Antigua in July 1989. The High Court gave judgment for the plaintiff, but the Court of Appeal set aside this judgment.

The sole ground of appeal levelled against the Court of Appeal’s judgment is that it is against the weight of evidence. Thus, in the plaintiff’s notice of appeal, and further elaborated in paragraph (13) of his statement of case, it is stated:

“(13) The main ground of appeal in this case is that the judgment is against the weights of the evidence alleged and adduced in the case. We submit that the crucial issue raised in this appeal is the legal inference to be drawn from the oral and documentary evidence adduced.”

Since the only ground of appeal is in respect of the weight of evidence, it is instructive to relate in detail the facts as disclosed by the oral and documentary evidence led before the trial court.

[p.711] of [1999-2000] 2 GLR 682

The facts as borne out by the evidence were that Cargill International SA Antigua (hereinafter referred to as Cargill) was a worldwide company with offices in many countries. It dealt in grain trading, transportation, production of by-products, cocoa and soyabean processing and numerous other activities. Kaguin Enterprise (Ghana) Ltd (hereinafter referred to as Kaguin) was on the other hand a limited liability company in Ghana which at the material time had one Mr Edward Sane, a Senegalese national, as its majority shareholder and managing director. This Edward Sane had worked with Cargill previously as a broker in Europe and other West African countries.

In February 1989, following the liberalisation of rice imports in Ghana, Mr Edward Sane informed Cargill of new market opportunities in this country. Thereupon, officials of Cargill made a visit to Ghana and met with officials of the Ghana National Procurement Agency (GNPA), Customs, the Bank of Ghana, and other government agencies. All these bodies confirmed that the market had indeed been liberalised, and strongly encouraged Cargill to supply rice to Ghana.

On the strength of the above favourable response, Cargill on 7 August 1989 brought into this country by its vessel Ocean Voice, 4,659.014 metric tonnes of rice accompanied by 47 bills of lading. Since Kaguin had opened no letters of credit, nor made any arrangement for the payment of any rice from Cargill, the latter entered into agreement with Umarco (Ghana) Ltd to take delivery and guarantee the security and condition of this rice. Umarco (Ghana) Ltd, which had a customs bonded warehouse, was part of an international company called Saga Group in Paris with whose branches Cargill had engaged their service in many countries. Now, paragraph 18B of this agreement between Cargill and Umarco, tendered as exhibit 11, stated:

“Umarco shall release to Kaguin by consignment of a maximum of 700 metric tonnes. However, before releasing a second consignment, Umarco shall obtain the following proofs:

(1) documentary evidence attesting to the fact that customs duties have been paid according to the current authorized schedules/rates and regulations applicable as to the time of exit of the merchandise;

[p.712] of [1999-2000] 2 GLR 682

(2) documentary evidence from a bank confirming the entry in their account books of the value of the merchandise in cedis and an irrevocable commitment of the bank to transfer its equivalent in US dollars to the credit of Cargill.”

On the basis of the above paragraph 18B of exhibit 11, Umarco (Ghana) Ltd released 700 metric tonnes of rice to Kaguin by indorsing seven bills of lading to them. The receipt of this quantity of rice was acknowledged by Kaguin in paragraph (7) of their statement of claim, as follows: “(7) When the said consignment arrived the defendant only released 14,000 bags of rice weighing 700 metric tones to the plaintiff.” But up to date Kaguin had not paid for the 700 metric tonnes nor complied with the terms of paragraph 18B of exhibit 11.

Now, sometime after receiving the 700 metric tonnes of rice, the deputy managing director of Kaguin, in the person of Mr Kwaku Diawusie (who in fact testified as Kaguin’s representative in this suit), in a letter dated 26 September 1989, tendered as exhibit 6, began to complain first to the auditors of Kaguin in respect of what he described as illegal and unauthorised acts of the managing director, Edward Sane. He followed this up with a complaint on 9 November 1989 to the National Investigation Committee (NIC). In that complaint, as borne out by exhibit 21, he accused Edward Sane of, inter alia, involving himself in retail trade in Ghana by unilaterally selling quantities of American long grain rice which had been imported into Ghana in breach of the Ghana Investment Code.

In the course of the NIC’s investigation into this complaint, two representatives of Cargill came down from Geneva and made a joint statement explaining how Cargill came to bring in the rice. In its report, exhibit 21, the NIC found, inter alia, that the rice were neither imported by Edward Sane nor Kaguin, and that the rice at all material time in Ghana remained the property of Cargill. The NIC therefore recommended that Cargill be allowed to direct Umarco as to what to do with the remaining quantity of rice in the bonded warehouse. Cargill therefore instructed Umarco, as borne out by exhibits 20 and 22, to release the remaining bags of rice for sale through Fablin Ltd. Umarco accordingly released the rice to Fablin Ltd.

[p.713] of [1999-2000] 2 GLR 682

Three years thereafter, Kwaku Diawusie, who had then become the managing director and sole shareholder of Kaguin Ltd, instructed solicitors to write to Umarco demanding that the latter account for the rice which had already been disposed of on the instructions of Cargill and also demanded that the proceeds of the said rice be paid into its account. When naturally, Umarco refused to bulge to these demands, Kaguin on 11 February 1994 issued the writ of summons at the High Court, Accra against Umarco, claiming:

“(1) A declaration that the plaintiffs are the owner consignees of 4,659.014 metric tonnes of rice imported from Cargill International SA Antigua in or about July 1989.

(2) An order upon the defendant to account to the plaintiff for the 4,659.014 metric tonnes or the importation of the said consignment disposed of by the defendants.

(3) An order upon the defendant pay general damages for conversion.”

At the trial, the case of Kaguin Ltd was presented by Mr Kwaku Diawusie who testified and tendered a number of exhibits. The defence of Umarco was presented by three witnesses: the first defendant witness, Lawyer Osa Mills, who was once a solicitor for Kaguin Ltd; the second defendant witness, Mr Max Paillades, a pensioner but who was the managing director of Umarco at the time Umarco took delivery of the rice; the third defendant witness, Mr C O Lamptey, the then chairman of the NIC.

In its judgment, the trial High Court found that Kaguin was the importer of the rice and therefore held that they were the owners of the rice. The court further held that since Kaguin was not a party to the agreement between Cargill and Umarco, that agreement was unlawful. The court also accepted the argument of Kaguin that the NIC had no jurisdiction to investigate the complaint lodged by Kwaku Diawusie. The court therefore granted the plaintiffs all its reliefs, ¢10 million general damages with ¢3 million costs. The judgment did not disclose how the court arrived at the ¢10 million general damages.

The Court of Appeal, on the other hand, found that the agreement between Cargill and Umarco was valid; that the NIC had jurisdiction to go into the complaint brought before it, and that the rice was not imported by Kaguin but that it remained the property of Cargill in the possession of Umarco. Accordingly, the

[p.714] of [1999-2000] 2 GLR 682 release and sale of the remaining rice by Umarco was upon the instructions of Cargill. The judgment of the High Court was therefore set aside.

As said earlier, the case of Kaguin was presented by Kwaku Diawusie alone who testified and tendered a number of exhibits. Of these exhibits, Kaguin relied on A, B, C and D as evidencing its ownership of the rice. Exhibit A was the bill of lading No LC–47 on which the consignee was “To Order” and the “Notify Address” had the name and address of Kaguin (Ghana) Ltd; exhibit B was a temporary invoice from Cargill to Kaguin on the rice, dated 15 June 1989; exhibit C was a photo sanitary certificate; while exhibit D was an SGS Clean Report findings.

Now exhibit 11, the agreement between Cargill and Umarco (Gh) Ltd, had no date on it, and therefore difficult for one to determine when it was made, that is whether it was made before the rice came in or thereafter. However, the evidence established that the 700 metric tons of rice released to Kaguin by Umarco (Gh) Ltd was done in accordance with paragraph 18B of the said agreement. Again, Lawyer Nii Osa Mills who testified for Umarco as the first defendant witness, and was once the solicitor for Kaguin and Mr Edward Sane, said that lie was aware of the existence of this agreement before he represented them at the NIC investigations. He said: “I was aware of the existence of this agreement before I went to NIC.” Paragraph (5) of this exhibit 11 stated: “Cargill shall send to Umarco, Tema copy of its temporary trade invoice drawn on Kaguin Ghana covering cost, insurance, freight value to Tema of the merchandise shipped.” Hence, the temporary or provisional invoice, exhibit B. And the import of such an invoice as rd explained in Halsbury’s Laws of England (3 ed), Vol 34 at p 171, is:

“A provisional invoice, if sent, is no more than an intimation of the way in which the sellers intend to perform their contract, and may merely be an intimation of the way in which the sellers are willing, as a concession, to perform.”

From the terms of exhibit 11 and the fact that Kaguin had made no provision nor indicated as to how it would pay for the consignment, it is too plain and commonsensical that exhibit B was intended to be nothing more than what is quoted above from Halsbury’s Law of England. It never vested ownership of the rice in Kaguin.

[p.715] of [1999-2000] 2 GLR 682

Exhibit C, the photo sanitary certificate, was evidence of the fact that the rice had been inspected according to the appropriate procedures of the importing country. While exhibit D, the SGS clean report findings also evidenced that the rice were shipped according to the import requirements of Ghana in terms of quantity, quality and price.

Now, although Kaguin was described on exhibits B, C and D as the importer of the rice, these three documents do not constitute the shipping documents, delivery of which to the buyer is symbolic of delivery of the goods to the buyer. In other words, these three documents do not constitute documents of title enabling the buyer to take delivery of the goods.

In a CIF contract, as it so appeared on the face of the invoice exhibit B, the requisite shipping documents are the invoice, bill of lading and policy of insurance. Thus, section 61 of the Sale of Goods Act, 1962 (Act 137) set out the conditions provided in subsections (c), (d), and (e) thus:

“61. In a c.i.f. contract, unless a contrary intention appears— (c) the seller is bound to transfer to the buyer proper shipping documents in accordance with the terms of the contract;

(d) the buyer is bound to take up proper shipping documents and, on doing so, to pay the price in accordance with the terms of the contract;

(e) the goods are deemed to be delivered to the buyer, and the property therein accordingly passes to the buyer, on the transfer to him of the bills of lading.”

The expression “proper shipping documents” is defined in section 64 to mean:

“(a) the seller’s invoices for the goods;

(b) bills of lading which acknowledge that the goods have been shipped and which contain no reservation as to the apparent good order and condition of the goods or the packing; and

(c) in a cif contract and in any other contract where the seller is bound to effect insurance on the goods, policiesofinsurance,or, where permitted by commercial custom, certificates of insurance.”

[p.716] of [1999-2000] 2 GLR 682

In the instant case, the bills of lading accompanying the rice in dispute were all consigned “To Order” and not to Kaguin. The particulars of Kaguin appeared at the “Notify address” column. In export trade and, as confirmed by section 61(e) of Act 137, a bill of lading is the evidence of the title and of the goods shipped, and by its endorsement and delivery, the transfer of the possession, and also of the property in the goods, is effected. All the bills of lading on the rice came into the hands of Umarco (Gh) Ltd by which Umarco had authority to take delivery of the rice. As pleaded by Kaguin in paragraph (5) of its statement of case:

“(5) The defendants were shipping agents, and were in receipt of the bill of lading, which stated that the plaintiff was the party to be notified of the arrival of the rice, and the consignee of the said goods was ‘To Order’”

Indeed, section 7(1) of the Bill of Lading Act, 1961 (Act 42) states:

“7. (1) Every consignee of goods named in a bill of lading, and every endorsee of a bill of lading, to whom the property in goods therein mentioned passes under the contract in pursuance of which the endorsement was made, shall have transferred to and vested in him all rights, and be subject to the same liabilities in respect of the goods as if the contract expressed in the bill of lading had been made with himself.”

Kaguin was not the consignee in the bill of lading, exhibit A. Kaguin was designated in the “Notify party” column, but this does not make Kaguin the consignee. Thus, as Amissah J A in CILEV v Black Star Line Ltd [1968] GLR 480 explained at 485-486:

“Where a person unto whom it is stated in this part that the goods are shipped differs from the one given in the ‘notify address,’ I cannot conceive the name given in that notify address being by any stretch of the imagination described as the consignee. It is simple commonsense that the consignee of good is the person to whom the goods are sent and not necessarily the address to be notified of the arrival of goods at its predestined port. All that the ‘notify address’ means to me is that if the address given is notified of the arrival of the goods the person to whom they are consigned or to whom they ought to be delivered will come forward to take delivery of them.”

[p.717] of [1999-2000] 2 GLR 682

It is often said that a CIF contract is not the sale of the goods themselves, but a sale of the documents relating to the goods. This is because in such a contract the delivery of the shipping documents to the buyer is deemed as delivery, and for that matter property and risk thereon passes to him. Thus the method of payment under a cif contract is for the buyer to pay to the seller the price of the goods in cash upon delivery of the shipping documents. Of course, the parties may also agree that payment shall be made by the buyer by acceptance of a bill of exchange against delivery of the shipping documents. In such a case, the bill of exchange drawn by the seller upon the buyer is forwarded to the buyer with the other documents, and the property in the goods does not pass unless the buyer upon presentation of the documents accepts the bill of exchange. Payment is also frequently made by means of a confirmed credit. Thus, section 63 of Act 137 provides:

“63. Where in a c.i.f. or f.o.b contract the price is to be paid by means of a letter of credit opened at a bank to be nominated by the seller, then in the absence of a contrary intention— (a) the credit must be opened not later than the earliest date on which the seller may ship the goods, or where the date of shipment is to be fixed by the buyer, not later than the earlier date on which the seller may be required to ship the goods;

(b) as against the buyer, the seller is only entitled to draw against the credit on presentation to the bank of proper shipping documents.”

Which of these methods of payment, or indeed any method of payment, did Kaguin adopt in the importation of the rice which it claims in his suit to be the importer and owner thereof? None whatsoever!

It is indeed the practice of shippers to protect their interest when a consignment has not been paid for to hold on to the commodity and allow it to remain their property by inserting in the consignee column “To order” as done in the instant case. And by inserting “To order”, Cargill was to direct the one to whom the rice was to be delivered. If Cargill had intended Kaguin to be the consignee they would have inserted Kaguin’s name in that column.

[p.718] of [1999-2000] 2 GLR 682

From the terms of the agreement, exhibit 11, it was evident that because Kaguin had not paid a pesewa nor opened any letters of credit for the purchase of the rice, Cargill was mindful of ensuring that any quantity of rice delivered to Kaguin on their instructions was paid for before further quantities were released to them. And as the evidence clearly established, the first 700 metric tonnes of rice, released to Kaguin on the instructions of Cargill in accordance with exhibit 11, had up to date not been paid for. The plaintiffs’ representative, Mr Kwaku Diawusie, admitted this while under cross-examination: “No I did not pay Cargill the cost of rice allocated to us.”

Indeed, throughout the entire trial, Kaguin who claims to be the importer/owner of the entire rice, never led a shred of evidence on the terms on which Kaguin agreed with Cargill to pay for the goods. They made no cash payment nor opened any letters of credit. Experienced traders like Cargill therefore would not consign their goods to unsecured importers like Kaguin. Hence, the precaution they took in engaging Umarco to store and guarantee the security and condition of the rice.

On the whole, one cannot help but discern some incongruity on the part of Kaguin in this action, especially on the part of Kwaku Diawusie who described himself in his evidence as: “. . . the sole shareholder and director in the plaintiff company.” This is the man who according to exhibit 20, the NIC report, had complained that:

“Edward Sane, even though a foreigner, had involved himself in the retail trade in Ghana by unilaterally selling quantities of American long grain rice which have been imported into Ghana in breach of the Ghana Investment Code”.

(The emphasis is mine.) It is this same rice which he now claims in this action to belong to his company, Kaguin, at a time he had succeeded in throwing out Edward Sane from the company. Can he now allege that the rice was properly imported by his company?

Next, by the report of the NIC, which Kwaku Diawusie was fully aware, the NIC found the rice to belong to Cargill and permitted it to direct Umarco to release it for sale. This was accordingly done. Again, Cargill shipped the entire rice consignment into the warehouse of Umarco (Ghana) Ltd and not to Kaguin. If, indeed, Kaguin genuinely believed that they imported the rice, why did they not direct their action against Cargill which

[p.719] of [1999-2000] 2 GLR 682 had obviously refused to deliver the rice to them. Umarco only acted as the agent of Cargill. And this fact of agency was not unknown to Kaguin. This action against Umarco when the facts fully disclose that Cargill had all along exercised control and ownership of the rice in Ghana, clearly testifies to the emptiness of Kaguin’s action. Throughout the whole of his evidence, Kwaku Diawusie never set out the terms on which Kaguin allegedly imported the rice.

On the facts, this action by Kaguin against Umarco is misdirected and certainly in bad faith. The proper person to sue, if Kaguin has any genuine case, is Cargill International and not Umarco (Ghana) Ltd.

Accordingly, I find that the judgment of the Court of Appeal is impeccable and fully supported by the evidence. The appeal therefore ought to be and is hereby dismissed.

Atuguba JSC. The plaintiff-respondent-appellants (hereinafter referred to as the plaintiffs) sued in conversion. In Street on Torts, (7th ed) at p 30, it is stated:

“Conversion may be defined as an intentional dealing with goods which is seriously inconsistent with the possession or right to immediate possession of another person. The tort protects the plaintiffs interest in the dominion and control of his goods; it does not protect his interest in its physical condition. It follows, therefore, that the tort is much concerned with problems of title to personal property. Indeed, many cases on conversion are in essence disputes on title . . .”

Also in Standard Chartered Bank v Nelson [1998-99] SC GLR 810, Charles Hayfron-Benjamin JSC, delivering the judgment of the court, stated at 817 thus:

“whenever, as in the present case, chattels belonging to one proper action are appropriated to the use of another, the proper action is in conversion. In so saying, we have derived much assistance from the learned authors of Clerk & Lindsell on Torts (12th ed), who state at p 899 that:

‘The world conversion, however, is the recognised legal expression for the wrongful deprivation of the possession of goods, and its use in this artificial and fictitious sense has now probably become inveterate.’”

[p.720] of [1999-2000] 2 GLR 682

(The emphasis is mine.) The question is whether the plaintiffs possessed, or had the right to the immediate possession of the goods in this case.

In John Holt Shipping Services v Edward Nasser & Co Ltd [1971] 1 GLR 205 at 206, CA, Archer JA (as he then was) stated the ancient principle that: “. . . the bill of lading . . . constituted the legal title of the respondents to the goods.” (The emphasis is mine.) This basic principle has been consistently followed: see Pan African Trading Co v Holland West Africa [1976] 1 GLR 237 at 238. In Tabury v Ghana Commercial Bank [1980] GLR 90 at 94, Sarkodee J said:

“The bill of lading in law and in fact represents the goods. Possession of the bill of lading places the goods at the disposal of the purchaser. See Biddel Brothers v E Clemens Horst Co[1911]l KB 934 at pp 956-957. However, delivery of the bill of lading operates as a symbolical delivery of the cargo and whether property in the goods by the indorsement and delivery of the bill of lading will pass depend upon the intentions of the parties that the property should pass. This can be inferred from the manner the parties carried on their business.”

In the House of Lords in E Clemens Horst Co v Biddel [1911-13] All ER 93 at 101, the Earl of Loveburn CJ said:

“The question is: When is there delivery of goods on board ship? That may be quite different from delivery of goods on shore. The answer is that delivery of the bill of lading when goods are at sea may be treated as delivery of the goods themselves. That is so old and so well established that it is unnecessary to refer to authorities on the subject.”

(The emphasis is mine.) It is therefore clear that in order to gain possession of or title to goods shipped under a bill of lading, one must be the holder of the bill of lading. But that means a holder as consignee or endorsee thereof. In this case, even if the plaintiffs came by the bill of lading, they were not the consignees or indorsee in any manner entitling them to the goods thereof. The plaintiffs were plainly, on the face of the bill of lading, which is the dominant document in CIF shipments, as in this case, holder of a “notify address.” That does not give them title or possession of the goods. That has been settled in CILEV v Black Star Line Ltd

[p.721] of [1999-2000] 2 GLR 682

[1968] GLR 480; Pan African Trading Co v Holland West Africa (supra) and Alfa Enterprises Ltd v Pan African Trading Co [1979] GLR 571, CA.

The fact that the plaintiffs’ claim to have been the purchaser is irrelevent. That was so laid down in CILEV w Black Star Line Ltd (supra) and Alfa Enterprises Ltd v Pan African Trading Co (supra). At no time did the plaintiffs’ (except those actually delivered to them by UMARCO) gain possession or title to the goods, per the bill of lading. In the Alfa Enterprises Ltd case (supra) at 574 Jiagge JA, quoted the following passage from Carver on Carriage of Goods by Sea at pp 710-711 thus:

“The right to have possession of the goods passes to the transferee of the bill of lading, that is the symbol of the goods, and a transfer of it is, symbolically a transfer of the possession of the goods themselves. Until the goods have been delivered, a delivery of the duly indorsed bill of lading operates, as between the transferor, and the transferee, and all who claim through them, as a physical delivery of the goods would do.”

(The emphasis is mine.) As noted at 575 per Jiagge JA however, there are a few instances in which the bill of lading will be ineffective in the hands of an indorsed holder, as where the vendor or shipper lacked title to the goods ab initio. But that is not so in this case.

I would therefore also dismiss the appeal.

Akuffo JSC. I agree that the appeal be dismissed.

Appeal dismissed.

LSNA